Category Archives: Apple

Why the Apple vs. the FBI case is important

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This morning’s Observer column:

No problem, thought the Feds: we’ll just get a court order forcing Apple to write a special version of the operating system that will bypass this security provision and then download it to Farook’s phone. They got the order, but Apple refused point-blank to comply – on several grounds: since computer code is speech, the order violated the first amendment because it would be “compelled speech”; because being obliged to write the code amounted to “forced labour”, it would also violate the fifth amendment; and it was too dangerous because it would create a backdoor that could be exploited by hackers and nation states and potentially put a billion users of Apple devices at risk.

The resulting public furore offers a vivid illustration of how attempting a reasoned public debate about encryption is like trying to discuss philosophy using smoke signals. Leaving aside the purely clueless contributions from clowns like Piers Morgan and Donald Trump, and the sanctimonious platitudes from Obama downwards about “no company being above the law”, there is an alarmingly widespread failure to appreciate what is at stake here. We are building a world that is becoming totally dependent on network technology. Since there is no possibility of total security in such a world, then we have to use any tool that offers at least some measure of protection, for both individual citizens and institutions. In that context, strong encryption along the lines of the stuff that Apple and some other companies are building into their products and services is the only game in town.

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The Wille E Coyote effect

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Benedict Evans is at the huge annual mobile phone gabfest in Barcelona. On his way he wrote a very thoughtful blog post about the world before smartphones, and why Nokia and Blackberry didn’t see their demises coming.

Michael Mace wrote a great piece just at the point of collapse for Blackberry, looking into the problem of lagging indicators. The headline metrics tend to be the last ones to start slowing down, and that tends to happen only when it’s too late. So it can look as though you’re doing fine and that the people who said three years ago that there was a major strategic problem were wrong. You might call this the ‘Wille E Coyote effect’ – you’ve run off the cliff, but you’re not falling, and everything seems fine. But by the time you start falling, it’s too late.

That is, using metrics that point up and to the right to refute a suggestion there is a major strategic problem can be very satisfying, but unless you’re very careful, you could be winning the wrong argument. Switching metaphors, Nokia and Blackberry were skating to where the puck was going to be, and felt nice and fast and in control, while Apple and Google were melting the ice rink and switching the game to water-skiing.

I love that last metaphor.

In a way, it was another example of Clayton Christensen’s ‘innovator’s dilemma’. It’s the companies that are doing just fine that may be most endangered.

It’s a great blog post, worth reading in full. Also reminds us that mobile telephony was much more primitive in the US than it was in Europe (because of the GSM standard over here), and that Steve Jobs and co really hated their ‘feature’ phones as primitive devices. Evans sees something similar happening now with cars. It’s no accident, he thinks, that tech companies (Apple, Google) are working on cars. Techies hate cars in their current crude manifestations, whereas the folks who work in the automobile industry love them. Just as Nokia engineers once loved their hardware.

What the FBI vs Apple contest is really about

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Wired nails it

But this isn’t about unlocking a phone; rather, it’s about ordering Apple to create a new software tool to eliminate specific security protections the company built into its phone software to protect customer data. Opponents of the court’s decision say this is no different than the controversial backdoor the FBI has been trying to force Apple and other companies to build into their software—except in this case, it’s an after-market backdoor to be used selectively on phones the government is investigating.

The stakes in the case are high because it draws a target on Apple and other companies embroiled in the ongoing encryption/backdoor debate that has been swirling in Silicon Valley and on Capitol Hill for the last two years. Briefly, the government wants a way to access data on gadgets, even when those devices use secure encryption to keep it private.

Yep. This is backdoor so by another route. It’s also forcing a company to do work for the government that, in this case, the government wants to do but claims it can’t. This will play big in China, Russia, Bahrain, Iran and other places too sinister to mention.

The FBI’s argument that the phone is vital for its investigation Seems weak. They already know everything they need to know, and the idea that the San Bernardino killers were serious ISIS stooges seems the prevalence of mass shootings in the US, and the say they conformed to type. What’s more likely is that the agency is playing politics. They’ve been arguing for yonks that they simply must have back doors. The San Bernardino killers presented them with a heaven-sent opportunity to leverage public outrage to force a tech company into conceding the backdoor principle.

No matter what you get up to in bed, there’s an app for it. Apparently.

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This morning’s Observer column about the obsession with ‘datifying’ our bodies.

There are two kinds of people in the world: those who are obsessed with the datafication of their bodies and those who are not. I belong to the latter category: the only thing that interests me about my heart is that it is still beating. And when it isn’t I shall be past caring. But if the current craze for wearable devices such as fitness trackers is anything to go by, I may soon find myself a member of a despised minority, rather like cigarette smokers, whisky drinkers and followers of David Icke…

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The Viking who is taking on Silicon Valley

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FT_Vestager

Terrific Financial Times profile of Margrethe Vestager, the EU’s Competition Commissioner, who is really getting up the noses of Silicon Valley’s overlords. Because of public hostility to the craven deal that HMRC negotiated with Google over back-taxes, many people here will be rooting for her. (She’s said that she is prepared to examine the deal.) But if her probe into Apple’s weird tax arrangements with the Irish government results in a colossal back-tax bill for the company, then we will really have moved into new territory.

For one thing, it’ll unravel a crazy system of international tax laws that dates back to 1928. And it’ll open all kinds of worm-cans — Amazon pretending that it’s based in Luxembourg; Facebook, Apple, Microsoft and Google pretending they’re based in Dublin; and so on. And of course the US will be mightily pissed off. Not bad for the daughter of two Lutheran pastors. Just as well that she’s a tough cookie. The FT profile has a nice story about her time as Deputy Prime Minister of Denmark. An opposition spokesman complained in Parliament that her proposed spending plans were “small”.

“Some think it is a rather small plan,” she retorted, with a mischievous grin. “But I am a bit cautious about trusting any judgments on size from men, and perhaps — but this might be a woman’s perspective — I am more interested in the effect.”

The “has Apple peaked?” meme is back. Sigh.

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But some horse-sense from Farhad Manjoo :

If Apple is now hitting a plateau, it’s important to remember that it’s one of the loftiest plateaus in the history of business. The $18.4 billion profit that Apple reported on Tuesday is the most ever earned by any company in a single quarter.

Yep. If this is failure, then I’d like some of it, please.

Corporate logic

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Apple has over $200B in cash, and yet it borrows money to fund buy-backs of its shares — to keep its investors happy. How come?

Simple, says the NYT:

Mr. Maestri [Apple’s CFO] said that Apple would continue to raise money in debt markets in the United States and abroad to continue to return money to investors in the form of dividends and stock buybacks. Because Apple houses the majority of its $216 billion in cash overseas, it has borrowed money over the last three years to pay out more than $9 billion to investors.

And why is that $216B housed overseas? Equally simple: if Apple repatriated it to the US, it would have to pay tax.